At the heart of the growing federal probe into alleged corruption in military procurement are America's defense consultants, a secretive breed who ply their trade in a rarefied world of high-tech weapons systems, high-class entertainment and high-pressure corporate deals worth billions.
For the most part, they operate out of the public eye. But the Department of Justice investigation that surfaced June 14 has bathed them in the glare of publicity and raised new questions about the cozy relationship among the Pentagon, the sprawling U.S. defense industry and the middlemen who serve them both.What began as an isolated Navy investigation in 1987 has mushroomed into something that congressional leaders warn may turn into a scandal of epic proportions.
So far, FBI search warrants have been carried out on 42 companies and individuals nationwide. No one has yet been charged with a crime, but a federal grand jury is looking into allegations of massive bid-rigging and insider trading of proprietary information in weapons procurement.
According to congressmen who were briefed by the chief prosecutor in the case, as many as 50 consultants and 100 Department of Defense contracts totaling tens of billions of dollars may be involved in the allegations.
Sources close to the investigation told The Baltimore Sun last week that up to 60 companies and two dozen Pentagon employees also may be involved.
According to those sources, bribes of $50 to $50,000 allegedly were paid to some government employees by consultants for classified documents used to help a particular defense contractor gain the advantage over another in the bidding process.
"What this says is there may have been some serious hanky-panky afoot, both with the exchange of classified information and the use of well-placed people who should have known better," said Irwin Feerst, an engineer and consultant from Massapequa Park, N.Y.
Inevitably, their high-powered lifestyle has invited comparisons with the insider-trading scandal that rocked Wall Street two years ago.
But to hear those involved in the industry, most see themselves as above-board purveyors of technical know-how and legitimate insider access that large corporate clients - companies like Boeing, General Dynamics and McDonnell Douglas - depend upon to land lucrative government contracts in an environment of intense competition.
"Most of the people I know in the business have impeccable credentials," said Jerry Cann, a former consultant who now works for General Dynamics in its undersea warfare division.
"Basically you have three kinds in this business," he said. "First, there are people with established management and technical backgrounds who understand the issues and requirements. Then there are those who are purely lobbyists and influence-peddlers, the entertainers and the glad-handers. And finally you have the crooks. I'd put 95 percent in the first category."
No one knows just how many defense consultants there are. Not all register as lobbyists, while others list themselves as associates of companies not easily identified as defense consultants.
Some are called "Beltway Bandits," a generic term for government workers-turned-consultants and their companies doing business with the government from offices near the stretch of Interstate 495 encircling Washington.
Most come from the military, corporate and technical fields. But their ranks also include academics, lawyers and Capitol Hill aides. Many of the latter gain an intimate knowledge of defense and national security issues through years of work on the House and Senate Armed Services committees and other key congressional panels.
There is probably no "typical' consultant, although the composite picture that emerges from interviews with critics, industry leaders and consultants themselves is of a middle-aged white male. He is hardly the loud, swashbuckling, cigar-smoking type - more likely he is a smooth, professional technocrat with expertise in a particular technical field.
In many cases he is a retired general, admiral or other senior officer, an electronics engineer or a high-level corporate executive who has decided to strike out on his own.
According to those familiar with the business, a well-connected consultant can easily gross $250,000 to $300,000 a year. Income of $75,000 to $80,000 is said to be common on the lower end of the scale. Perquisites are routine, including the use of limousines and lavish entertainment budgets by higher-priced consultants.